India’s transport minister said that if U.S. electric car maker tesla is willing to open a factory in India, the government can provide various incentives to ensure that Tesla’s manufacturing costs in India are lower than in China.
Minister Nitin Gadkari recently said in an exclusive interview with Reuters about Tesla’s operational plans, “They should use local services in India to locate the whole car manufacturing here, not just assemble the car in India. We will step up and provide all the incentives.”
He added, “The government will ensure that Tesla’s production costs are the lowest in the world, even lower than China.”
Tesla is investing billions of dollars to build a super factory in Shanghai, China, in early 2019. The company hopes the first Tesla car manufacturing plant outside the U.S. will eventually produce 250,000 electric vehicles a year and have a presence in China, the world’s largest auto market.
India’s efforts to attract Tesla with incentives to set up a factory will encounter a big challenge. It is estimated that only 5,000 of the 2.4 million vehicles sold in India last year were electric vehicles. In contrast, China sold 20 million vehicles last year, including 1.25 million new energy vehicles, including electric vehicles. Tesla’s sales in China account for one-third of total global sales.
However, Tesla is preparing to expand its operations in India. A few weeks ago, Tesla registered a company in India and plans to start with importing and selling Model 3 electric cars as its main business.
Last year, Google Inc. announced a $10 billion investment in India over the next five to seven years, showing that India is making progress in its efforts to attract foreign investment.
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